https://www.youtube.com/watch?v=T7-yaroVBCc
Sep.21 -- Yale University Senior Fellow Stephen Roach discusses S&P's downgrade of China's sovereign credit rating. He speaks on "Bloomberg Surveillance." - (2:04)
Stephen Roach on China's debt problem:
“I actually can't believe you guys even report what rating agencies do anymore.”
“These are notoriously lagging indicators. They're the last ones to know anything.
“There’s a fire in the room, everybody’s left the room, and they’re saying, “I think the smoke detectors are going,” says Yale’s Stephen Roach.
“China has a debt problem. China has talked very directly and explicitly about the problem for a number of years. You can be critical of China for not having moved aggressively to force its state owned enterprises to delever. This is a big issue that's being debated inside China right now,” Roach continued. “They've set up a financial stability committee, government-wide, state-council-wide, managed by the President Xi Jinping.
They’ve hiked their domestic interest rates to address this they have the made some personnel changes in the regulatory area and they're likely to appoint a new central banker who's very focused on financial stability so, this is not new news, this is old news.”
“And S&P, I think it's very last one to figure this out. The big point to make on China in debt is that China has the largest reservoir of saving the world so it owes its debt to itself.”
